1. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 1 1 Hispanics and the Retail Environment Leylha Ahuile Senior Multicultural Analyst

2. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 2 About Mintel Mintel International For over 35 years we have been a trusted, reliable research partner providing unique insight into consumer trends, market trends and product innovation. Mintel is a leading global supplier of consumer, product and marketing intelligence.

3. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 3 Brief overview of Hispanic demographics Revisiting the Hispanic consumer in this economy: Changes in expenditure by category The Hispanic shopper mindset and how acculturation impacts behavior The Hispanic retail shopper by category and level of acculturation Overview of “Hispanics and the Retail Experience” What are the hidden opportunities for retailers?

4. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 4 4 Hispanic Demographics

5. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 5 Hispanics are… purchasing power projected to reach more than $1.4 trillion by 2013 population projected to grow by 12.9%, compared to 2.9% by non-Hispanics from 2008-13 in 2008, 62.7% of all Hispanics were less than 34 years old nearly 50% of Hispanic households have children Hispanic babies are now 24% of the nation’s total baby population vs. 20% in 2000 Mintel’s report: Hispanics and the Retail Experience, July 2009

6. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 6 How do you determine level of acculturation? Acculturation Language spoken at home Language spoken at work Language used for reading Place of birth Educational attainment Place of residence Personal desire Mintel report: Hispanic Acculturation Process—U.S., January 2009

7. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 7 U.S. Household Income Distribution Mintel’s report: Hispanics and the Retail Experience, July 2009

8. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 8 Income Earners by Language Preference at Home % Multiple earners, multiple decision makers and influencers. Mintel’s report: The Economic Impact of Hispanics in the U.S. Marketplace, June 2009

9. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 9 The Larger Hispanic Household 36% of Hispanic households include 5 or more people, compared to 17% of non-Hispanics. Mintel’s report: Hispanics and the Retail Experience, July 2009

10. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 10 Hispanics in Today’s Economy

11. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 11 Attitudes Towards Their Finances More than three quarters of Hispanics say that their personal finances are in fair or poor shape while 61% of non- Hispanics believe so. 75% of Hispanics are now looking for deals and sales more than they were one year ago. Almost half of Hispanics believe that their financial situation will improve in 2009, compared with only a third of the general U.S. population. Mintel’s report: The Economic Impact of Hispanics in the U.S. Marketplace, June 2009

12. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 12 Expenditure by Category Hispanic expenditures grew by 78% across all categories from 2001 to 2007, compared to 33% for non-Hispanics. Based on Mintel’s exclusive analysis, growth is estimated to continue by 1.81% between 2007 and 2009, compared to 1.1% for non-Hispanics. Mintel’s report: The Economic Impact of Hispanics in the U.S. Marketplace, June 2009

13. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 13 Hispanics’ Category Expenditures Mintel’s report: The Economic Impact of Hispanics in the U.S. Marketplace, June 2009

14. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 14 The Hispanic Shopper Mindset

15. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 15 Hispanics’ Spending Habits Nearly all Hispanics (87%) consider themselves to be careful with money. Regardless of income, 86% of Hispanics say that they always shop for the best deal. Hispanics overspend in certain categories relative to their level of household income. 65% of Hispanics are now spending less on non- essential items. Nine out of 10 Hispanics aged 35-44 believe that it is more important to provide for family. Mintel’s report: The Economic Impact of Hispanics in the U.S. Marketplace, June 2009

16. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 16 Couch to Cash Register What motivates the Hispanic consumer to shop? Price sensitive but not the only factor Prefer stores that are closer to home They look for the shopping experience – part entertainment Trust is a key factor among less acculturated Hispanics Coupons do not drive traffic to the store but are purchasing drivers Mintel’s report: Hispanics and the Retail Experience, July 2009

17. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 17 Macho Shopping % Mintel’s report: Hispanics and the Retail Experience, July 2009

18. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 18 The Hispanic Retail Shopper

19. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 19 Channel Analysis: The Communal Shopping Cart Hispanic and non-Hispanic spending on CPGs by retail channel Mintel’s report: Hispanics and the Retail Experience, July 2009

20. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 20 See you mañana, maybe… Hispanic and non-Hispanic shopping annual trip frequency by channel Mintel’s report: Hispanics and the Retail Experience, July 2009

21. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 21 Distance Considerations Hispanic travel distance by store type Mintel’s report: Hispanics and the Retail Experience, July 2009

22. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 22 Food Retailers Higher propensity to eat at home and spend more on groceries regardless of income. Less acculturated Hispanics are less likely to feel the store they shop offers the products they are looking for. Nearly three in five Hispanics use coupons when shopping: – Nearly 7 in 10 of English-dominant – Slightly more than half of Spanish-dominant Almost 2/3 of Hispanics prefer to see bilingual signage. Mintel’s report: Hispanics and the Retail Experience, July 2009

23. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 23 Household Grocery Spending $113 $119 All Hispanics $116 Hispanic English Spanish Mintel’s report: Hispanics and the Retail Experience, July 2009

24. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 24 Retailers of non-Food Items Almost two thirds of more acculturated Hispanics shop their favorite apparel store because they like the brands offered Less than half of less acculturated Hispanics choose an apparel store based on brands carried in the store Hispanics shop at drug stores at identical levels to non- Hispanics but over index in consumption of personal care items Spanish-dominant Hispanics are much less likely than English-dominant Hispanics to convert their shopping occasions into a purchase of home electronics. Mintel’s report: Hispanics and the Retail Experience, July 2009

25. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 25 Home Improvement Mintel’s report: Hispanics and the Retail Experience, July 2009 The Home Depot Television Ad

26. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 26 Convenience Store Preference by Race/Hispanics Mintel’s report: Hispanics and the Retail Experience, July 2009 %

27. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 27 Convenience Store and the Hispanic Shopper Hispanics use the corner store at a much higher rate than any other consumer group Hispanics are notably more likely to purchase automotive products and phone calling cards Healthier snack options…not so fast! Hispanics aged 18-34 are the most likely to shop in convenience stores once a week or more often Financial services are of interest to young Hispanics Home office and home entertainment, opportunities for retailers Mintel’s report: Hispanics and the Retail Experience, July 2009

28. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 28 Opportunities for Retailers

29. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 29 Retailers to Offer Financial Services The Banking Hispanic Closely related to a non- Hispanic consumer in terms of attitudes and use of banking. Household income is more likely to be greater than $75K Prefers to communicate in English The Underbanked Does not participate in the traditional U.S. banking system. Likely to use alternative banking systems Prefers to communicate in Spanish Mintel report: Hispanic Finances and Financial Services, March 2009

30. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 30 Hispanics and Bank Services by Place of Birth Mintel report: Hispanic Finances and Financial Services, March 2009

31. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 31 The Customer Service Desk Approximately one in four Hispanic shoppers make their way to the customer service desk of grocery stores to conduct financial transactions: Check cashing Paying household bills Sending remittances Purchasing pre-paid credit cards Mintel’s report: Hispanics and the Retail Experience, July 2009

32. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 32 Financial Conveniences by Acculturation Mintel’s report: Hispanics and the Retail Experience, July 2009 %

33. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 33 Opportunities for Retailers Hispanics (55%) are slightly more likely to pay cash for things than non-Hispanics (53%) Nearly half of Hispanics are not able to save money because they are living paycheck to paycheck Almost half of Hispanics believe that their financial situation will improve over the next year, compared with only 33% of the general U.S. population. Mintel’s report: Hispanics and the Retail Experience, July 2009

34. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 34 Questions & Answers

35. © 2009 Mintel International Group. All rights reserved. Confidential to Mintel. 35 Contact For more information about Mintel, please contact us at 312.932.0600, visit www.mintel.com, or email us at us_marketing@mintel.com.www.mintel.com us_marketing@mintel.com

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